Spencer Co. has a $200 petty cash fund. At the end first month the expense receipts total $182 ($43 for delivery expenses, $127 for merchandise inventory, and $12 for miscellaneous expenses). The fund has cash balance remaining of $16. The journal entry to record the reimbursement of the account includes a:

Question

Business

Jair Hatfield

5 January, 00:51

Spencer Co. has a $200 petty cash fund. At the end first month the expense receipts total $182 ($43 for delivery expenses, $127 for merchandise inventory, and $12 for miscellaneous expenses). The fund has cash balance remaining of $16. The journal entry to record the reimbursement of the account includes a:

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Answers (2)

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Lillianna Monroe · Answer 1

The Journal Entry will be as follow

Dr. Delivery expense $43

Dr. Merchandise Inventory $127

Dr. Miscellaneous expenses $12

Dr. Cash Short / Excess $2

Cr. Cash $184

Explanation:

Expenses had debit nature so, they are recorded by debiting the relevant account.

Petty cash is an asset which also has debit balance. As the petty cash is used so, to reduce the its balance, it is credited.

Cash To be reimburse = $200 - $16 = $184

As there are only $182 of Expenses receipts, resultantly $2 is short out of cash. It is recorded in the cash short or excess account to make the cash balanced with the cash actually in hand.

Cesar Browning · Answer 2

Debit petty cash $182, Petty cash deficit $2, and credit cash $184

Explanation:

Petty cash is a system used to manage small purchases that can not be settles with check or credit cash payments.

A petty cash book is used to manage the flow of transactions in a petty cash system.

Another key term in petty cash is reimbursement, which is the replacement of amount spent through a petty cash. The amount is calculated and debit to petty cash book in the main ledger while the source of reimbursement amount, either cash or check is credited with the same value.